Organizations often face the “build it or buy it” decision: whether to expand “organically,” or to expand through some form of business combination such as mergers or acquisitions, joint ventures, licensing, franchising (a form of licensing), or contractual, strategic alliances.
Discuss the key advantages and disadvantages of organic expansion and each of the listed forms of business combination for an international expansion. Support your views with relevant examples.
Instructions: In your responses to classmates, build on their analysis by offering a suggestion of three to four key supply chain metrics and how you would propose setting goals or targets for those metrics.
When it comes to describing the relationship between supply chain and profitability within a company it boils down to having an effective and efficient supply chain management team in place.
When improving delivery times, customer service and delivering the right products can eventually build revenue. Optimizing these 4 ways will definitely improve profitability.
Improving inventory management, able to meet demands and controlling the right amount of stock needed, having to not order unnecessary stock, keep a watch on automatic processes from vendors, and having checks and balances in place is the path to take. Checking to make operating expenses are correct “by continually measuring whether the right product in the right quantity is delivered to the right place at the time is required by client, supply processes can further optimized and costly errors avoided. A factor that is at least as important in order to save costs is the settlement of payments with clients, reducing the term between ordering and payment, solving late payments, making missing payments visible and invoicing for them can save a great deal” (Adriaansen, J, 2014).
Supply chain can be at a competitive advantage for a company by identifying core competencies which are things that the organization does well and to be able to partner so the success of supply chain and operations are met. Also to have desired product in stock, quick delivery, more sales, low inventory levels, great customer service, working with vendors and retailers to get the greater profitability when using strategies, to ” all achieved because companies know their core competencies and out source non-core competencies to their supply chain partners” (Mentzer, J. 2007).
The supply chain operations reference model (SCOR) is away to help to improve, to communicate, and address SCM decisions within the company, customers and retailers. The model helps with processes and framework such as plan, source, make, deliver and return to help to identify and supply chain problems. There are many levels of process to help analyze the company’s supply chain (SCRC SME, 2004).
Adriaansen, J. (2014). Four ways to improve profitability in supply chain management. Retried from
Mentzer, J. (2007). Achieving competitive advantage through supply chain management. Retrieved from
SCRC SME. (2004). The scor model for supply chain strategic decisions. Retrieved from
Having an innovative and efficient supply chain helps to allow a company operate more effectively, ultimately helping their profitability. If a supply chain is not efficient or performance is lacking, it is unlikely the company will be profitable. Therefore, it is for the best interest of the company to ensure everyone in the supply chain is working to deliver the utmost value to the end user. Efficiency within the supply chain is required for profitability as it helps to reduce waste and excess costs. For companies that are able to work together within a supply chain, they will experience cost savings, growth, and larger profits (Hugos, 2018).
Operating a supply chain with strong levels of communication and visibility helps improve one’s competitive advantage. A supply chain allows for differentiation and value added ways to improve how a company operates. Additionally, it helps with demand forecasting and reducing the bullwhip effect, better meeting the needs of the end user. Collaboration and sales and operations planning (S&OP) helps to work through changes and to sustain a competitive edge. A supply chain allows the parties to come together to improve their operations to do better at delivering products. A successful supply chain is receptive to changes and demands in the market (Hugos, 2018).
The SCOR model is used to benchmark measurements of an organization with hopes of improving performance and profitability. This is important to use as it helps align objectives for all parties involved in the supply chain (Zhao et al, 2019). This model focuses on several aspects, including the plan, source, make, and deliver (Hugos, 2018). Supply chain metrics and attributes include reliability, responsiveness, costs, agility, and asset management efficiency (“Understand the Structure of SCOR”, 2020). These can be used to drive improvements within the supply chain and help the supply chain communicate effectively (Zhao et al, 2019).
Hugos, M. (2018). Essentials of Supply Chain Management (4th ed.). Hoboken, NJ: Wiley
Understand the Structure of SCOR. (2020). ASCM. Retrieved from https://www.apics.org/apics-for-business/benchmarking/scormark-process/scor-metrics
Zhao, S. T., Wu, K., Yuan, X., & Zheng, M. M. (2019). A Scor-Based Analytical Coordination Model for an Integrated Supply Chain in a Pharmaceutical Company. International Journal of Industrial Engineering, 26(4), 525–554.